Coverage is not likely going to be the primary reason for deployment either of Release 15 or Release 16 5G networks, according to GSMA. The early 5G networks based on LTE Release 15 will be deployed in dense urban areas to boost capacity for human users of mobile networks and will use macrocell architectures, GSMA predicts. The emphasis there is capacity and smartphones. Eventually, some use cases for 5G might actually add coverage, such as small cell deployments for indoor venues.

Those early deployments, in all likelihood, will allow operators of 5G networks to experiment with other potential new revenue sources and use cases. Still, the early deployments will not primarily support new revenue sources to a major extent.

With a few exceptions, 5G is the first mobile platform developed with new categories of lead apps in mind. Most significantly, it is the first mobile next generation platform intended to support sensors and other machine applications.

But the traditional uses of next generation platforms (additional capacity for human users) likely will drive the initial deployments, as the business case is clearest.

If and when that happens, it is likely to happen with 5G Phase 2 (LTE Release 16, based on small cell deployments). But that also is where the uncertainty about business drivers is most unclear. If the assumption is that “adding capacity” is the primary application, in dense urban areas where standard macrocell architectures will work, then the question arises: what drives the demand for an overlay network of small cells?

Cost is the principal concern, GSMA says. The basic rule of thumb has been that shrinking the cell radius 50 percent quadruples the number of cells.

So dense small cell networks in urban areas will require considerable capital investment. A small cell network will require shrinking cell radii far more than 50 percent.

Mobile operators’ need for a new business model is most stark here. If new use cases do not emerge that support investment, then under the current operator business model rollout is likely to be patchy and slow, GSMA says.

That search for new services, use cases and revenue drivers already is mirrored in access provider response to the disaggregated application market, where the way most apps get created is by third parties, not app providers directly.

That is one reason why access providers who can do so invest directly in third party app, content, advertising or transaction firms. That replaces the older “vertically integrated” model for creating applications such as voice or mobile text messaging. In colloquial terms, the strategy is pretty simple: “you need to own at least some of the apps that flow over your network.”

On the other hand, one might argue, there is no need for a small cell overlay, if standard macrocells work for dense urban areas. Others might well argue that using new millimeter wave spectrum, in any setting (urban, rural or suburban) will require use of small cells, for signal propagation reasons. In that view, most 5G deployments will be of the small cell type.

Operators are expected to roll out 5G at a similar rate to the deployment of 4G, attaining coverage of 34 percent of the global population, 2.6 billion people, by 2025.

Gary Kim is a communications industry analyst of 30 years, ranked second globally among power influencers in mobile and among the top 10 telecom thought leaders.
He currently works as a telecom/Internet conference content developer and speaker.
He recently founded the Spectrum Futures conference for the Pacific Telecommunications Council, and acts as a conference advisor for PTC.
He is a member of Mensa, the international organization for people with IQs in the top 2 percent.